U.S. | Australia Tax Considerations

Are you a U.S. citizen or green card holder living in Australia?

If so, there are tax considerations that could affect your financial future. Moodys Gartner Tax Law provides cross-border tax advice for U.S. citizens living in Australia on complex topics such as renouncing U.S. citizenship, Superannuation funds, and the Foreign Account Tax Compliance Act.

Why Moodys Gartner

Moodys Gartner Tax Law is a leading North American law firm with one single focus: tax. Our focus on cross-border taxes means our Canadian and U.S. tax lawyers, Canadian Chartered Accountants, and U.S. Certified Public Accountants thrive on providing customized strategic solutions for complex tax issues that impact our clients’ bottom line. Our roots are in Canada, where we built our reputation advising individuals and business entities that engage in everyday business transactions on both sides of the Canada/U.S. border. However, our expertise in U.S. taxation allows us to offer U.S. tax advice to anyone with ties or activities in the United States, regardless of where they live in the world.

Canada and Australia possess a kinship as part of the Commonwealth that includes a similar history and legal system, and U.S. persons in Australia face U.S. tax issues that are similar to those faced by U.S. persons in Canada. That’s where Moodys Gartner Tax Law comes in. Whether you’re looking to learn more about the U.S. tax implications of your Australian Superannuation fund, how the Foreign Account Tax Compliance Act affects you, or considering renouncing your U.S. citizenship, read through this knowledge portal to see how we can help, or contact us to find out more.

Marsha-Laine Dungog JD, LLM, US Tax Lawyer

Marsha is a Director at Moodys Gartner Tax Law. She brings nearly 20 years of experience in international tax consultancy, specializing in cross-border acquisitions, financing, and expansion.

Marsha is an engaging public speaker and author on US cross-border tax and Australian Superannuation Funds (ASF). Her technical ASF tax analysis has been presented before several government agencies and tax organizations, such as the US Department of Treasury (Tax Policy) and the Australian Tax Institute.

Alexander Marino JD, LLM (US TAX) US Tax Lawyer

Alex leads our expatriation group at Moodys Gartner Tax Law, and has assisted hundreds of clients on five continents in renouncing their U.S. citizenship. He represents approximately 9% of all worldwide renouncers annually. Alex educates potential renouncers on the pros and cons specific to their unique situation, to help determine if renunciation is the right decision for them. If so, he is there through each step of the process. He regularly speaks on the topic of US renunciation and expatriation in Canada and around the world.

Superannuation

Firstly, we would like to thank those who attended our Australia renunciation seminars in Melbourne, Sydney, Perth, and Brisbane. Thanks to the interest of so many US expats across Australia, we are proud to report we hosted our most successful seminars to date.

Thanks to the combined support from each city, we received significant media attention on multiple aspects of renunciation. To provide as much information as possible to those interested, we have compiled all relevant news coverage relating to our time Australia.

The Australian Superannuation fund is part of Australia’s national pension scheme and constitutes one of the pillars of Australian social security. The Super is a hybrid structure created under Australian law to encourage Australian workers to accumulate savings for retirement at preferential rates. The Super has no equivalent under U.S. law. Its structure is so unique that the U.S. Internal Revenue Service has yet to issue definitive guidance on how it should be treated for U.S. tax purposes. This has resulted in confusion and sometimes misreporting, which may result in burdensome tax and reporting consequences.

Moodys Gartner Tax Law has engaged in an open dialogue with the IRS and tax-writing committees of the U.S. Congress in order to assist them in formulating a fair and workable classification of the Super for U.S. tax purposes – one that avoids the possibility of double taxation. We strive to bring certainty of your U.S. tax liabilities and reporting obligations to enable you to take appropriate steps to becoming compliant without the fear of incurring civil and criminal penalties.

U.S. TAXATION OF THE SUPER

Generally, the Super pays Australian taxes on contributions and income at the rate of 15 per cent. Under U.S. tax law, U.S. persons who are beneficiaries of a Super are also subject to U.S. tax on this income, even if he or she does not have access to the funds. Unfortunately, the Australia-U.S. tax treaty offers little relief for U.S. persons who reside in Australia. In fact, the treaty does not address the U.S. taxation of the income of a Super even though it should be treated in a similar fashion to a foreign national pension scheme. Consequently, a U.S. person residing in Australia who is the beneficiary of a Super is in an uneasy confluence of both Australian and U.S. tax laws.

SUPER REPORTING

Due to the lack of IRS guidance on how a Super is classified and taxed under U.S. tax law, there has been confusion on how to properly report Supers. This is not the case with U.S. persons living and working in Canada, Hong Kong, India, Ireland, Israel, Netherlands, New Zealand, Singapore, the United Kingdom, and other countries that have updated tax treaties that exempt similar pension schemes from U.S. taxation. A Super should be reported for U.S. tax purposes in a manner that is consistent with its true nature without having to bear the punitive and costly tax consequences of doing so.

Our team of experienced U.S. lawyers and Certified Public Accountants can provide clarity on this complex topic. We’ll walk you through every step of the reporting process to ensure you become fully compliant with your U.S. tax obligations and reporting requirements without having to sacrifice your financial future to do so.

Roy A Berg and Marsha Dungog were quoted in an article entitled “SMSFs warned on hidden estate tax”, August 8, 2017, SMSF Adviser

Roy A Berg speaks to Accountants Daily editor Katarina Taurian about the dizzying level of detail you need to be aware of for your clients who are US citizens, or Australian citizens with ties or investments in the US, August 4, 2017, The Accountants Daily Podcast

Marsha-Laine Dungog JD, LLM, US Tax Lawyer

Marsha is a Director at Moodys Gartner Tax Law. She brings nearly 20 years of experience in international tax consultancy, specializing in cross-border acquisitions, financing, and expansion.

Marsha is an engaging public speaker and author on US cross-border tax and Australian Superannuation Funds (ASF). Her technical ASF tax analysis has been presented before several government agencies and tax organizations, such as the US Department of Treasury (Tax Policy) and the Australian Tax Institute.

Foreign Account Tax Compliance Act (“FATCA”)

FATCA was recently adopted by Australia pursuant to an intergovernmental agreement. As a result, Australian domestic law now requires all Australian financial institutions to report U.S. person depositors to the Australian Tax Office, which reports them to the IRS. This potentially creates U.S. tax consequences for Australian resident U.S. persons who are not current with their U.S. tax reporting obligations.

Moodys Gartner Tax Law has a thorough understanding of FATCA, and can provide advice to any U.S. persons living in Australia who are wondering how FATCA affects them. Contact us to learn more.

News

Testimony

Roy Berg (Witness), Testimony before Canadian House of Commons, Standing Committee on Finance Regarding Canadian Legislation Consequences to FATCA Legislation (May 15, 2014), available at https://www.youtube.com/watch?v=TtYjCcNc Uk.

Publications

Roy A. Berg, Are you a US citizen with an Australian Mortgage? Beware of a Potentially Nasty Tax Surprise! (PDF)

Roy A Berg speaks to Accountants Daily editor Katarina Taurian about the dizzying level of detail you need to be aware of for your clients who are US citizens, or Australian citizens with ties or investments in the US, August 4, 2017, The Accountants Daily Podcast

Mary Teresa Bitti and Julius Melnitzer, Which will come first: A decision in the FATCA legal challenge or the first exchange of info?, FINANCIAL POST (Aug. 26, 2015) (quoting Roy Berg), available at financialpost.com.

U.S. RENUNCIATION

The “Super” reason Australians are renouncing their US citizenship (PDF)

Renouncing Your U.S. Citizenship: Is Divorcing Uncle Sam Right For You? (PDF)

Renunciation of US Citizenship – Failed Amendment May Signal That Now Is The Time To Get Out! (PDF)

Media Coverage

Alex Marino and Kevin Kirkpatrick discuss giving up your US citizenship if you’re an American living in the UK in this article entitled, “Renouncing US citizenship or giving up a green card: why and how to consider it”, June 13, 2017, Expat Info Desk

Alex Marino speaks to 640 AM News Radio Toronto regarding why record numbers of US citizens are renouncing their US citizenship, June 1, 2017

Alexander Marino discusses American expatriates renouncing their US citizenship in an article entitled, “Why are American expatriates renouncing their citizenship? It’s not because of Trump”, April 29, 2017, The Calgary Herald

Alexander Marino speaks to the Edmonton Sun about US citizenship renunciation in an article entitled, “Escaping the tax man accounts for Americans renouncing citizenship”, April 29, 2017, The Edmonton Sun

Alexander Marino is quoted in an article entitled, “Why are American expatriates renouncing their citizenship? It’s not because of Trump”, April 29, 2017, Edmonton Journal

Alexander Marino speaks to the Lethbridge Herald about an upcoming renunciation seminar in an article entitled, “U.S. tax lawyer to discuss renouncing U.S. citizenship”, April 27, 2017, Lethbridge Herald

Alexander Marino speaks to the Red Deer Advocate about why an increasing number of US citizens in Canada are renouncing their US citizenship in an article entitled, “Tax laws push more Americans to renounce citizenship”, April 13, 2017, Red Deer Advocate

Alexander Marino is quoted in the Kelowna Daily Courier in about why increasing numbers of US citizens are choosing to renounce their citizenship in an article entitled, “Giving up U.S. citizenship subject of seminar Friday”, April 3, 2017, The Daily Courier

Alex Marino and Kevin Kirkpatrick discuss why a dual Israeli-US citizen may consider giving up their US citizenship, “Renouncing US citizenship or giving up a green card: why and how to consider it”, March 24, 2017, Jewish Business News

Moodys Gartner Tax Law is mentioned in an article entitled, “US citizens renouncing because of tax laws affecting Australian superannuation”, September 11, 2016, Sydney Morning Herald

Alexander Marino is quoted in an article entitled, “Americans flocking to renounce their citizenship”, August 13, 2016, Lethbridge Herald

Alexander Marino is interviewed by 630 CHED in Edmonton in regards to the high volume of US citizens renouncing their US citizenship and the Moodys Gartner US renunciation seminar in Edmonton on August 6, July 29, 2016, 630 CHED

Alexander Marino is interviewed by CBC Radio Vancouver in regards to the rise of US citizens living in Canada renouncing their US citizenship, and the Moodys Gartner US renunciation seminar in Vancouver, May 25, CBC Radio Vancouver

Roy Berg is interviewed by AM 770 Radio in regards to the high volumes of US citizens in Canada renouncing their US citizenship, and the Moodys Gartner US renunciation seminar in Calgary, May 21, 2016, AM 770 Radio Calgary

Roy Berg and Alexander Marino discuss the pros and cons of renouncing US citizenship, March 12, 2016, Experts Hour AM640

CBC Radio interviews Alexander Marino about the causes behind the increase of American or dual citizens residing in Canada who wish to renounce their US citizenship – April 23, 2014, CBC Radio Calgary

The Lawyers Weekly published an article by Roy Berg and Alexander Marino that offers a high-level overview of US citizenship renunciation in regards to FATCA legislation – March 21, 2014, The Lawyers Weekly

Roy Berg explains the reasons why so many Americans are now choosing to “jump ship” where US citizenship is concerned – August 26, 2013, AccountingWEB

Roy Berg interviewed by Global News regarding a spike in the number of American expats renouncing their citizenships – August 15, 2013, Global News

FATCA

Testimony

Roy Berg (Witness), Testimony before Canadian House of Commons, Standing Committee on Finance Regarding Canadian Legislation Consequences to FATCA Legislation (May 15, 2014), available at https://www.youtube.com/watch?v=TtYjCcNc Uk.

Publications

Roy A. Berg, Are you a US citizen with an Australian Mortgage? Beware of a Potentially Nasty Tax Surprise! (PDF)

Mary Teresa Bitti and Julius Melnitzer, Which will come first: A decision in the FATCA legal challenge or the first exchange of info?, FINANCIAL POST (Aug. 26, 2015) (quoting Roy Berg), available at financialpost.com.

Alexander Marino JD, LLM (US TAX) US Tax Lawyer

Alex leads our expatriation group at Moodys Gartner Tax Law, and has assisted hundreds of clients on five continents in renouncing their U.S. citizenship. He represents approximately 9% of all worldwide renouncers annually. Alex educates potential renouncers on the pros and cons specific to their unique situation, to help determine if renunciation is the right decision for them. If so, he is there through each step of the process. He regularly speaks on the topic of US renunciation and expatriation in Canada and around the world.

It’s about you.

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